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Research: Are Credit Card Rewards Rewarding as They Claim to Be -

Credit cards give away incentives that are very attractive to credit card users. Establishments like gas stations, department stores, restaurants and hotels, support the credit card companies reward programs as they also benefit from them. Whenever you use your credit cards with these companies you gain points which you can redeem for rewards like free travel tickets, gift cards, discounts, free fuel, and many others.

With you spending too much to earn points, you may ask yourself, are these rewards really rewarding? To some people it can be, but rewards that you gain may not be applicable for you or in some cases it's not worth the price, may be you're just into the fever of getting something for free. Nevertheless, there are some cards that really offer rewards that are not only satisfy your needs but you can say it's worth the spend.

To use your credit card to your full advantage, you have to:

• Know the limit of your rewards. Every credit card offer limited rewards although you earn points constantly. For example, your cash back reward from your gasoline purchases are only limited to 5%.

• Check if your rewards are worth spending. You might be spending too much to earn points for an item that costs a lot less if you buy it with cash. For example, you spent $100 to earn points for a $5 item. This is not the usual case, because if you have credit cards that offer double points especially for air mile cards, you spend less to earn big points automatically.

• Figure out how much the points cost. When you know how much you have to spend to earn points, you can proper allot money for it rather than overspend.

• Avoid incurring monthly balances. If you're monthly balances pile up, you may not be able to pay for it and you'll lose your points. You have to pay higher interest rates for missed payment, thus instead of saving money for your next purchase you're losing more.

• Understand your gas rewards. Gas rewards credit cards give up to 5% cash back on you gasoline purchases. To avail the cash back rewards, you have to purchase gas from certain gasoline stations that recognizes your credit card. A disadvantage may be that some store or merchandisers may not recognize your credit card, so even if you bought an item from them you won't earn any point or cash back reward.

• Look for credit cards that offer rewards at a lower level of spending. Frequent flyer miles credit cards do such a thing. These credit cards allow you to earn double mile points easily even if you spend less.

• Know what stores, establishments or services give the most points. Some partner stores of your credit card company give extra bonuses when you shop with them using credit cards that they accredit. If you can, then shop with them so you can gain points much easier.

No matter how attractive the rewards program is, you need to keep in mind that these are awarded only if you use your credit cards. Remember that with every purchase using your credit card, you need to pay extra for the interest. Hence, it is still important to consider your budget if you can't afford it, then don't buy it, even if it guarantees a free trip around the world.